Post Time:Nov 05,2010Classify:Company NewsView:504
The US Federal Reserve will spend another US$600 billion (HK$4.68 trillion) to buy Treasuries. The amount is US$100 billion more than what the market expected.
As a result the US dollar lost more ground against many currencies and the Hang Seng Index closed 1.6 percent higher.
So Dr Check suggests holding on to high beta blue chips.
Investors can consider Xinyi Glass (0868), which regular readers know that I recommend from time to time. It hit a 52-week high of HK$6.42 in late October. As Xinyi issued a 100 percent special bonus share in May, the stock price is equivalent to HK$12.22, thus clearing the high of HK$11.40 set in September 2007. In other words, the stock is at a record high now.
Looking at the glassmaker's earnings, there is strong ground to support the rally. For the financial years 2006 to 2009, net profit grew 49 percent, 72 percent, 5 percent and 9 percent, respectively. Its interim profit for the six months to June this year surged a hefty 185 percent.
Third-quarter float-glass sales soared 80 percent - equaling sales in the first half.
Xinyi is now trading at 15 times expected 2010 earnings. It is not expensive if you consider the firm is expanding production at its Anhui, Wuhu and Tientsin plants.
It has also just bought back another two million shares at around HK$6.02 each. So far this year, management has bought back 30.67 million shares, so why not follow them? Dr Check and/or The Standard bear no responsibility for any investment decision made based on the views expressed in this column.
Source: http://www.thestandard.com.hk/news_detail.asp?we_cAuthor: shangyi
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